relief under the GST Act for the Non Receipt of Value of the SaleInvoice

[SURESH CHOPRA]

1. Sir,

We are a Registered MSME in Karnataka. We had effected Inter State sales of Components to our clients duly following the procedures under the GST Act . The customers have also already taken the Input Tax Credit of the Tax paid by them in their Returns. But so far they have not made any payment to us on our Supply to them .

Please advice us whether there is any provision in the GST Act to collect the Invoice Value ? If so, what is the procedure, please . What are the other option open to us to collect the money? Expecting the advice from experts.

S.K.Chopra

[Ganeshan Kalyani]

Sir, there is a condition on the customer to pay the invoice value to the supplier within a period of 180 days from the date of purchase so as to claim input tax credit. If he does not pay you then he will have to reverse the input tax credit so claimed.

As regard you another query, in my view, there is no provision under GST which provides for collected of sale proceeds from the customer. Further, in my view, under MSMED Act, you may get a solution.

[KASTURI SETHI]

As per Section 9(1) of CGST Act read with relevant notifications, tax is levied and is to be collected from Service Receiver or buyer except RCM

[Ganeshan Kalyani]

As stated by Sri Kasturi Sir, there is a provision u/s 9(1) of CGST Act, to collect GST from the customer by the taxpayer on taxable outward supplies.

Sri Kasturi Sir, thanks for highlighting the provision which I missed in my previous reply.

AI Summary

Input tax credit requires buyer payment within prescribed period; nonpayment triggers reversal and supplier lacks GST power to recover invoice. A supplier queried recovery of unpaid invoice amounts where buyers have taken input tax credit. The replies state buyers must reverse input tax credit if they do not pay within the prescribed period, and that GST law does not provide a mechanism for suppliers to collect sale proceeds; Section 9(1) CGST establishes tax liability/collection from the recipient but does not enable supplier recovery of consideration. The MSMED Act is suggested as a potential non GST remedy.